Chip stocks rallied Thursday after strong Microsoft and Lam Research earnings: Lam Research closed up 18%, Micron 18%, Sandisk 26%, Arm 7%, AMD 13%, Intel 11%
Samantha Subin /CNBC:
Context & Ripple Effects
The rally reverses a sharp risk-off stretch for the same semiconductor and storage names: investors had sold Sandisk, Arm and AMD after SK Hynix’s disappointing results, while Micron and Sandisk had also led a June technology selloff. Strong results from Microsoft and Lam Research now provide a fresh earnings-based read-through across chips, memory and storage.
First-order effects
- Lam Research rose 18%, and the positive reaction spread immediately to Micron (18%), Sandisk (26%), AMD (13%), Intel (11%) and Arm (7%).
- Microsoft’s strong earnings and Lam’s results reset near-term investor sentiment for the named chip and infrastructure suppliers after the recent sector decline.
Second-order effects
- The breadth of the move makes individual semiconductor earnings a more important test of whether Thursday’s optimism extends beyond Lam and Microsoft; companies tied to memory, storage, processors and chip equipment are being repriced together.
- The rebound underscores how quickly the group can reverse: the same memory and storage cohort that fell in the June tech selloff is now leading the upside, increasing sensitivity to subsequent results.
Third-order effects
- If earnings continue to produce cross-category moves, semiconductor valuations may remain driven less by company-specific performance and more by changing views of AI-related infrastructure demand across the supply chain.
- The repeated swings point to a contracted semiconductor cycle in which results from a few bellwether buyers and suppliers can transmit rapidly through memory, equipment and compute stocks.
The trend: AI-infrastructure expectations are increasingly linking the market performance of chip equipment, memory, storage and processor companies, amplifying both earnings-driven rallies and selloffs.